Australia - Subsidy on Ammonium Sulphate
Australia Ammonium Sulphate (Source: GATT Analytical Index)
|Products at issue||
|Type of product||
Pharmaceutical and chemical products
Key legal aspects
|Other members||Representative of Australia, Representative of Chile, Representative of Norway, Representative of United Kingdom, Representative of United States|
|No of Pages (total / legal reasoning)||7 (and 2 annex)|
|Request for consultations|
|Request for establishment|
|Adoption of report|
|Mutually agreed solution|
|Outcome of the proceedings||
Report adopted, mutually agreed solution
|Additional Info||GATT/CP.3/SR.41 (12/08/1949) Contracting Parties Third Session - Summary Record of the Forty-First Meeting (12/08/1949) Chile (GATT/CP.3/61) "no intention of pursuing this further at the present session subject to agreement on future procedure. (...) He expressed the hope that the bilateral discussions would be successful. "GATT/CP.4/23 (07/03/1950) Declaration of the Chilean Delegate: memorandum submitted for the consideration of the Contracting Parties.
GATT/CP.4/SR.3 (24/08/1950) Contracting Parties Fourth Session - Summary Record of the Third Meeting (24/02/1950) Australia: discussions in progress. "It was agreed to postpone consideration of this item." (Original underlined.)
GATT/CP.4/SR.14 (17/03/1950) Contracting Parties Fifth Session - Summary Record of the Fourteenth Meeting (13/03/1950) Discussion on the matter between the parties and other Contracting Parties.
GATT/CP.4/SR.15 (14/03/1950) Contracting Parties Fifth Session - Summary Record of the Fifteenth Meeting (14/03/1950) Establishment and composition of the Working Party.
GATT/CP.4/39 (31/03/1950) Contracting Parties Fourth Session - Report of Working Party G on the Australian Subsidy on Ammonium Sulphate: The Working Party examined the factual situation resulting from the removal, on 1 July 1949, of sodium nitrate from the pool of nitrogenous fertilisers subsidised by the Australian Government. The Working Party found that this removal did not involve any prohibition or restriction on importation within the meaning of GATT Articles III:2 and XI:1; sodium nitrate and ammonium sulphate were not "like products" within the terms of GATT Article I (listed separately in the tariffs of Australia and other countries and enjoyed different tariff treatment); and the maintenance of the Australian subsidy on ammonium sulphate could not be considered as justifying q claim of injury under GATT Article XIV. Therefore, there was no evidence that the Australian Government had failed to carry out its obligations under the Agreements. The Working Party next considered whether the injury which the Government of Chile had said it had suffered represented a nullification or impairment of a benefit accruing to Chile directly or indirectly under the General Agreement. Such impairment would exist if the action of the Australian Government which resulted in upsetting the competitive relationship between sodium nitrate and ammonium sulphate could not reasonably have been anticipated by the Chilean Government, taking into consideration all pertinent circumstances and the provisions of the General Agreement, at the time it negotiated for the duty-free binding on sodium nitrate. The Working Party concluded that the Government of Chile had reason to assume, during these negotiations, that the war-time fertilizer subsidy would not be removed from sodium nitrate before it was removed from ammonium sulphate. The Working Party thus concluded "that the Australian action should be considered as relating to a benefit accruing to Chile under the Agreement and that it was therefore subject to provisions of Article XXIII. (...) the Australian Government, in granting a subsidy on account of the wartime fertilizer shortage and continuing it in the post-war period, had grouped the two fertilizers together and treated them uniformly. Under such circumstances it would seem that the Chilean Government could reasonably assume that the subsidy would remain applicable to both fertilizers so long as there remained a local nitrogenous fertilizer shortage. The Working Party has no intention of implying that the action taken by the Australian Government was unreasonable but simply that the Chilean Government could not have been expected during the negotiations in 1947 to have foreseen such action or the reasons which led to it." The Working Party recommended "that the Australian Government consider, with due regard to its policy of stabilizing the cost of production of certain crops, means to remove any competitive inequality between nitrate of soda and sulphate of ammonia for use as fertilizers which may in practice exist as a result of the removal of nitrate of soda from the operations of the subsidized pool of nitrogenous fertilizers".
GATT/CP.5/SR.6 (09/11/1950) Contracting Parties Fifth Session - Summary Record of the Sixth Meeting (06/11/1950) Australia: "satisfactory agreement had been reached between the two Governments. The terms of agreement had been filed with the secretariat and there would therefore seem to be no need for any further study of the item." Chile: "had accepted the terms of agreement. (...) satisfactory as a whole. The Contracting Parties should, therefore, now consider the matter concluded."